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The 192nd General Court of the Commonwealth of Massachusetts

Section 105: Fidelity and corporate surety companies; powers

Section 105. A company organized under the fourth clause of section forty-seven or corresponding provisions of earlier laws may make contracts of insurance to guarantee the fidelity of persons holding positions of trust in private or public employment or responsibility, and may, if accepted and approved by the court, magistrate, obligee or person competent to approve such bond, act as joint or sole surety upon the official bond or the bond, recognizance or other undertaking in civil and criminal procedure of any person or corporation to the United States, to the commonwealth or to any county, city, town, judge of probate and insolvency or other court, sheriff, magistrate or other public officer, or to any corporation or association public or private; and also may act as joint or sole surety upon any bond or undertaking to any person or corporation or to the commonwealth conditioned upon the performance of any duty or trust, or for the doing or not doing of anything in said bond specified, and upon bonds to indemnify against loss any person or persons who are responsible as surety or sureties upon a written instrument or otherwise for the performance by others of any office, employment, contract or trust. If by law two or more sureties are required upon any obligation upon which such company is authorized to act as surety, it may act as joint or sole surety thereon, and may be accepted as such by the court, justice, magistrate or other officer or person authorized to approve the sufficiency of such bond or undertaking; and so much of section nine of chapter two hundred and five as requires that sureties on bonds to a judge of probate shall be residents of the commonwealth shall not forbid the acceptance of a qualified foreign company as joint or sole surety on any such bond. A bond given by it under section twenty of chapter one hundred and fifty-eight, section eighteen of chapter one hundred and sixty-eight or section fifteen of chapter one hundred and seventy shall be in a form approved by the commissioner of corporations and taxation or the commissioner of banks, respectively, and an attested copy of such bond, with a certificate of the custodian that the original is in his possession, shall be filed with the commissioner concerned. No such company shall incur in behalf or on account of any one person a liability for an amount larger than one tenth of its net assets, unless it shall be secured from loss thereon beyond that amount by suitable and sufficient collateral agreements of indemnity, by agreements of other joint surety or sureties relative to the amount of liability assumed by it or them, by deposit with it in pledge or conveyance to it in trust for its protection of property equal in value to the excess of its liability over such limit, or, if such liability is incurred in behalf or on account of a fiduciary holding property in a trust capacity, by such deposit or other disposition of a suitable and sufficient portion of the estate so held that no further sale, mortgage, pledge or other disposition can be made thereof without such company's approval, except by the decree of a court having proper jurisdiction.

In cases where an individual surety would be required to make an oral recognizance in open court or before a justice or other magistrate, a company authorized by this section to act on such recognizance as sole surety shall, instead of recognizing orally by an officer or agent, enter into a bond duly executed by the principal, and in behalf of such company acting as surety, by its officer or agent thereto duly authorized, and sealed with its corporate seal, and neither the principal nor the surety shall recognize orally. The condition of the bond shall be the same as that of an oral recognizance taken in such cases from an individual surety, and the bond shall be subject to the approval of the court, justice or other magistrate, who shall endorse his approval on it. Such bond, if approved by the court, justice or other magistrate, shall not be defeated by reason of the failure of the principal to execute the bond, or by any failure to comply with the provisions of this section that would not defeat the bond at common law as against the company acting as surety.

The commissioner shall transmit forthwith to each register of probate and insolvency, to the clerk of each district court, to each clerk of the courts, to the clerks of the superior court for civil and criminal business in the county of Suffolk and to the clerk of the supreme judicial court for the county of Suffolk, the names of all corporate surety companies as they become or cease to be qualified to do business in the commonwealth.

This section shall apply to all companies authorized to transact the business specified in the fourth clause of section forty-seven.